WASHINGTON--The Bush administration has approved an innovative Indiana program that will extend state-subsidized health insurance coverage with consumer-driven features to low-income uninsured residents.
The plan, which is funded in part by an increase in the state's cigarette tax, is set to begin on Jan. 1, 2008. It will be available to residents whose incomes do not exceed 200% of the federal poverty level, which would be $20,420 for an individual and $41,300 for a family of four. Additionally, residents must be uninsured at least six months and not be eligible for employer-provided health insurance.
Under the Healthy Indiana Plan, which received Bush administration approval last week as a so-called Medicaid demonstration project, the state will pay for $500 a year in preventive services, which include annual physicals, smoking cessation programs, prostate exams, mammograms and diabetes testing.
Enrollees will have an annual deductible of $1,100. To cover that deductible, the state and enrollees will contribute a total of $1,100 to a so-called Power Account, which is similar to health reimbursement arrangements used by many private-sector employers. Employers also can contribute to employees' Power Accounts.
Like an HRA, accumulated contributions in a Power Account will roll over from year to year, offsetting an enrollee 's future contributions.
Beneficiaries' contributions to Power Accounts will be linked to their incomes and range from 2% to 5% of gross annual incomes. For example in the case of a single adult whose annual income is $10,210, the state would contribute $896 to the Power Account, while the individual would contribute $204.
After medical costs exceed $1,100, health insurance coverage will be provided that has a $300,000 annual limit and a $1 million lifetime limit. Insurance policies are written by Indianapolis-based Anthem Insurance Cos. Inc. and AmeriChoice, a unit of Minnetonka, Minn.-based UnitedHealth Group Inc.
State officials said they expect about 50,000 residents to enroll in the program during the first year.
For reprints of this story, please contact Lauren Melesio at 212-210-0707 or email lmelesio@crain.com
